Commentary on NY Court of Appeals Fracking Decision

For the future of fossil fuel extraction in America, here is an important and possibly game-changing development (although I was just informed that French actress Audrey Tautau’s upcoming 38th birthday is “just as important, dude, if not more so…”).

The New York Court of Appeals’ ruling to allow municipalities to use their zoning powers to ban the practice of induced hydraulic fracturing is certainly not novel–or really even limited to fracking. That communities may use zoning laws to limit activities on land is black letter law in nearly every American jurisdiction. But the clash of interests on each side of the fracking issue–opponents correctly argue that harmful methods of extraction threaten natural resources and human health, while producers correctly argue that fracking is getting America closer to energy independence–has been exceptionally intense, loud, emotional, enduring.

Fracking technology is not new — and has been used for over 50 years to extract shale gas, tight gas, tight oil, and coal seam gas. Fracking’s methods have never been particularly safe or without environmental risks. Geologists have known for decades about substantial shale natural gas reserves underneath us that fracking methods might be able to extract. So what’s really new? It’s the huge, bold, previously unthinkable scale on which more recent fracking methods are based and are now being used all over the country. From the standpoint of the production of energy, and cheaper energy at that, it has been a hands-down success. No question.

Here’s the problem, which is largely a matter of public relations. Each of the two respective arguments mentioned above–and this is not always the case, folks–has both merit and broad appeal. And, importantly, the nature of each of these overall arguments allows both sides to affect a certain righteous indignation. Opponents of fracking (i.e., let’s protect humans, environment) have the advantage here. No one can deny either the morality or rationality of putting humans and nature first.

Proponents of fracking (i.e., fracking is the key to American energy independence, and helps create needed jobs) appeal to patriotism, energy security and ameliorating the jobless recovery. Granted, the energy industry has made a very similar argument in the past (e.g., compliance with new regs forcing us to upgrade air pollution control equipment will eat up jobs) when faced with environmental barriers. Now, with a huge new supply of cheaper, domestic natural gas in the balance, that energy producer argument is more compelling than ever.

So both sides are “right”. In government and politics, that can happen. But both sides here are apparently willing to devote significant resources, passion, organizational time and political capital to the fight, and fight indefinitely. That, frankly, is rare.

On July 7, The Hill, the daily newspaper covering Congress, wrote about the New York ruling in “‘Watershed moment’ for fracking foes?”, but hasn’t identified any significant long-term response from the energy industry. Our take is that the New York decision should and will stick as a matter of basic constitutional law, and will be closely looked at as a roadmap by other state judiciaries in similar cases. From proponents of fracking, you are likely to see a difficult, ardent and slightly demented attempt to ‘federalize’ fracking, probably under the Commerce Clause and coupled with policy arguments that the importance of energy security should trump local and state rights (which if successful in our judgment would make for bad law).

In any event, fracking, which no one sane and educated really likes, is here to stay, with or with or without zoning constraints, as long as producers keep finding ways to get leases on substantial “new” fossil fuel reserves. For some pols, the unexpected appearance of “successful” fracking on a huge scale is even a bit embarrassing. President Obama, an environmentalist, and Commenter-in-Chief who often chimes in gratuitously on big issues, has stayed away from the issue.

Right now, the best argument anyone can make for fracking is probably this: “Even though energy companies lack safe, efficient technologies for fracking, we all need the energy source. We need the BTUs”.

We expect that, in time, people will demand a better, more reassuring argument.